In re Rosenthal & Lehman

• Decision Date: 29 November 1902
• Parties: In re ROSENTHAL & LEHMAN.
• Court: U.S. District Court — Eastern District of Missouri

120 F. 848

In re ROSENTHAL & LEHMAN.

United States District Court, E.D. Missouri, Eastern Division.

November 29, 1902

Sale &amp Sale, for trustee.

Solomon S. Swarts, for bankrupts.

ADAMS District Judge.

This record certified to me by the referee raises the question whether a fee should be allowed to attorneys of bankrupts for attending them on the occasion of their examination before the referee. Section 64b of the bankruptcy act of 1898 (U.S Comp. St. 1901, p. 3447) is as follows:

'The debts to have priority, except as herein provided, and to be paid in full out of bankrupt estates, and the order of payment shall be (1) the actual and necessary cost of preserving the estate subsequent to filing the petition (2) the filing fees paid by creditors in involuntary cases; (3) the cost of administration, including the fees and mileage payable to witnesses as now or hereafter provided by the laws of the United States, and one reasonable attorney's fee, for the professional services actually rendered, irrespective of the number of attorneys employed, to the petitioning creditors in involuntary cases while performing the duties herein prescribed and to the bankrupt in voluntary cases, as the court may allow. * * * '

This is an involuntary case, and therefore one reasonable attorney's fee, such as the court may allow for professional services actually rendered to the bankrupt while performing the duties prescribed by the act, should be included in and paid out of the estate as a part of the cost of administration.

By the provisions of section 7 of the act (U.S. Comp. St. 1901, p. 3425) it is made the duty of the bankrupt in all cases to attend the first meeting of creditors, if directed by the court so to do; and when there, and at such other times as the court may order, 'to submit to an examination concerning the conducting of his business, the cause of his bankruptcy, his dealings with his creditors and other persons, the amount, kind and whereabouts of his property, and in addition all matters which may affect the administration and settlement of his estate. ' The same section imposes other duties upon the bankrupt, some of which (like preparing schedules of property and list of creditors) from their nature justify and require the aid of professional counsel; while others (like complying with specific orders of court, or informing the trustee of any attempt known to him of creditors or other persons to evade the provisions of the act), from their essential nature, do not require, and would not justify, the employment of professional counsel to aid the bankrupt in their performance. And there are still other duties of the bankrupt (like attending the hearing upon his application for discharge from his debts) which may or may not require the aid of professional counsel in their performance.

From these observations, as well as from the language employed in section 64b (U.S. Comp. St. 1901, p. 3447), it seems clear that Congress did not intend by the provisions of the last-mentioned section to lay down a fixed rule authorizing a bankrupt to employ, at the expense of the estate, counsel to attend him in the performance of every duty prescribed by the act. Only such a reasonable attorney's fee as the court may allow in each individual case, and only such professional aid as the nature, exigency, and difficulty of the duty to be performed in each individual case reasonably require, seem to have been within the contemplation of Congress, as shown by a...